Upoming health care reform

How many have been paying attention to this? Right now there looks to be two competing "bills", well I call them bills but they're more a pile of ideas that have been written down at this point.

I've been listening to a lot of debate on these two plans on the radio the last few days as the congressmen have been on while I'm driving.

The first plan which is getting billed as the consensus plan is an idea put forward by House leadership. This bill is being kept under lock and key, and there's a lot of security on even being able to read it. Most are only allowed to be given a bullet point summary of what's on it. According to the more right wing congressmen this plan is essentially the ACA all over again. It has a few changes but most of them don't mean anything. The biggest changes are that it adjusts the individual mandate from paying a penalty to government directly to the insurance companies instead, that if you drop insurance for any reason you will have to pay a big fine to get it again (and if you don't, you can pay them a penalty cost instead), and a couple other very small changes that I don't remember.

Meanwhile, other groups like the freedom caucus and a few others in the House have been trying their own plan. John Oliver did a segment this past Sunday talking about them. Basically it's a four part plan, that tries to cobble something together out of a bunch of piecemeal ideas. HSA's, block grants, high risk pools, and refundable tax credits. All of which sound ok to mediocre in theory, but less useful in practice. For those who don't know what those four items are I'll explain:

HSA's - Health Savings Accounts. These are basically a form of tax shelter. You're allowed to put pre tax money into them and have that money sit there so that it can cover medical needs as things arise. The problem with these, is that they only work if you're making a lot of money. Most proposals have looked at the idea of being able to put 10 to 15% of your income in these. That might (and I do stress might) be sufficient for routine doctor care and prescriptions but it falls short of any serious illness. If you get cancer you're looking at needing $2 million to treat it, which would mean you needed to earn $20 million and spend nothing else on health care in order to cover it out of your HSA. This will happen a lot to lower and middle class families who simply can't afford to save anything. And when they do, they won't have enough saved to cover an expensive treatment.

Refundable Tax Credits - A plan to give people a tax credit based on age, in order to purchase insurance. The current proposal is $1200 up to age 35 and $3000 after age 60. Putting aside the fact that these credits are too low, this is essentially nothing more than the government subsidizing insurance. If there's any merit to the arguments that Obamacare is making insurance too expensive, then the government subsidizing it with tax credits will run into the same problems.

Block Grants - This is intended to be a catch all. For those who can't afford treatment. Basically it's money that gets earmarked to Medicaid by the federal government every year for their funding. This sounds ok in theory, but it also means that Congress can simply cut health care to the poor any time they feel like it. The main risk is that block grants dole out a specific amount of money, but if treatment costs rise the grants don't keep up and they begin to cover fewer and fewer people. At the rates being proposed, they would kick roughly 1/3 of current people off of Medicaid over a decade because they aren't designed to scale with treatment costs.

High risk pools - This is the last of the big items. Basically, high risk pools are a way to isolate those who are sick from those who are healthy. It makes all of the sick people pool costs with much higher priced insurance, while those who currently don't need expensive treatments pay lower prices. This has a couple of issues, while it's great for healthy people, as soon as you get sick you move into a high risk pool and if you switch insurance due to a pre existing condition you start off in the high risk pool. These pools aren't anything new, but what's being proposed is a dramatic expansion of them. In previous years, high risk pools have had their costs subsidized by the government. The current proposal is $3 billion over 3 years. One year of spending right now for Obamacare levels of coverage for high risk pools costs $178 billion.

So basically, health care reform looks like two options right now. One that only covers the rich, and the other which is almost exactly the same as the ACA but with different branding.

a reply to: Aazadan

Great topic. I wish we had a link to actual legislation (text) to discuss.

It's refreshing to see that republican have come around to the ACA being a good reform. A lot of misery and lies could have been skipped if they realized this years ago.

originally posted by: gription
a reply to: Aazadan

Great topic. I wish we had a link to actual legislation (text) to discuss.

Me too, but the legislation for the one plan is being kept secret, the other is just a bunch of ideas being floated around.

If Rand Paul was telling the truth in his interview that I caught yesterday, the plan is being kept secret because they know it's essentially Obamacare all over again and they don't want to face criticism for that so it's going to be kept as secret as possible until it's passed.

a reply to: Aazadan

arent they claiming that they lost it right now? (lofl)

a reply to: Aazadan

Keep it current please. This is literally life and death for many. Partisan politics be damned.

I don't know how anyone the voted for these Republicans can support them after this. How many years have they tried to repeal the ACA so they could "fix" healthcare? How many of them got voted into office because of their stance on the ACA?

Turns out they lied to their constituents and never had a plan at all. All their crying, complaining, and promises were simply empty words to score political points.

One thing that I forgot to put in my OP is that most of these ideas revolve around the idea of tax free income, and we're talking a pretty big chunk out of your effective tax rate too. On the order of the average person dropping from 12% to 2%. But 47% of federal revenue comes from the income tax. If we chop that by 5/6 we're talking about a 40% hit to federal revenues, in a time where spending increases are being proposed. It's not financially sound, which means hidden taxes will have to be added back in to get the revenues at which point we're paying taxes and needing to pay for these programs. The end result is a lot of expense.

originally posted by: veracity
a reply to: Aazadan

arent they claiming that they lost it right now? (lofl)

Not that I've heard, but it's always possible. Then again, I'm not sure how credible Rand Paul is on the subject, he was claiming on radio yesterday that insurance companies saying they need the mandate if they have to cover everyone is merely them being greedy and makes no fiscal sense.

Until the underlying structural issues of the healthcare market are addressed, nothing is going to work. When I look at healthcare I see a couple of major issues mostly driven by government interference that have led to cost inflation.

1) Lack of competition. The insurance market has to be opened up so that people can shop for insurance like any other product. Any state barriers need to be removed.
2) Lack of portability. Insurance needs to be decoupled from employers. The individual needs to be in control, not the employer. Imagine how screwed up your car insurance would be if you could pretty much only buy it through your employer?
3) Insurance as a health maintenance plan. Consumers need to stop expecting that insurance covers every little cough and headache. Insurance is meant to be there as a back stop against something catastrophic financially, not pick up the cost of your annual physical or your flu shot. Insurance is there for when you a break a leg, birth of a child, major surgeries, etc.
4) Third payor. Because consumers are not the ones making the purchase decision, we are removed from price. This leads to price inflation because there is no incentive to shop around. If you want an annual physical, you should be able to just call around to a bunch of doctors and see how much they charge for a physical.

We know the free market works cost wise because we see how cheap elective surgeries and other services are when insurance IS NOT involved. Look how cheap Lasik is nowadays. Breast implants. Butt enhancements. Insurance generally covers none of this stuff and doctors are competing on price and service like any normal functioning market.

a reply to: Edumakated

Lack of competition isn't an issue, several insurers are already able to offer across state lines but for the most part they choose to not do it. More competition is always good, and I see no reason to limit anyone to within state lines, but at the same time this is effectively just a talking point. There's not actually any benefit to doing so other than the fact it will make a few people happy.

I agree completely though with your point about portability.

The health maintenance issues, I agree with you on as well... insurance cannot work when routine costs are covered, that's just not what it's designed to do. However, that's what people want it to do, and that's what they're going to continue to use it for. This is much more of a cultural issue, and one of the areas where I think single payer wins out because it actually can address this want from the people. Insurance can only deal with catastrophic costs.

Last, is the free market issue. Lasik and breast implants are very elastic, people for the most part don't need to have them. But if you get cancer, you need to get treatment, and that means the doctors, hospitals, and everyone else involved have more leverage to charge more money because your only other option is death. I don't think the free market works in such a circumstance. It's like food. Even when food prices are high, you have to eat.

a reply to: Aazadan

This is legislation that will affect all Americans. It shouldn't be under lock and key! Sometimes I wonder why they just don't open this to the public. Maybe someone who has a lot of experience dealing with the insurance industry and healthcare issues could offer ideas these power heads haven't thought of doing? More heads are better than just a few!

Sometimes I wonder why we even have representatives if legislation can't be debated and televised on the house floor! Since this affects all Americans, there should be "two" final health care bills that should be voted on by the public. I don't like the idea of leaving the healthcare of millions of Americans in the hands of representatives who have their own selfish political agendas.

Every major piece of legislation that affects all Americans should be voted by ALL AMERICANS! Our system is controlled by too much self-centered political and corporate influence. It doesn't reflect the will of the people.

a reply to: Aazadan

My opinion is that the ACA needed to be fixed and funded for greater market stability, lowered premiums and costs, lower deductibles and in general made more fair for everyone.

If the House does that, I don't give a hoot what they call it, though to try and take credit for the whole thing is basically a complete politically expedient lie. I just want my kid to live.

Obama himself has said they could repackage it as Trumpcare and he'd be fine with that, so there you have it.

I just don't want the high risk pools that have spectacularly failed in the past, along with the savings accounts and other Rich-people benefits to be the way this goes down. People will die.

Good OP and thanks for posting.

originally posted by: WeRpeons
a reply to: Aazadan

This is legislation that will affect all Americans. It shouldn't be under lock and key! Sometimes I wonder why they just don't open this to the public. Maybe someone who has a lot of experience dealing with the insurance industry and healthcare issues could offer ideas these power heads haven't thought of doing? More heads are better than just a few!

Sometimes I wonder why we even have representatives if legislation can't be debated and televised on the house floor! Since this affects all Americans, there should be "two" final health care bills that should be voted on by the public. I don't like the idea of leaving the healthcare of millions of Americans in the hands of representatives who have their own selfish political agendas.

Every major piece of legislation that affects all Americans should be voted by ALL AMERICANS! Our system is controlled by too much self-centered political and corporate influence. It doesn't reflect the will of the people.

The issue is POLITICS. Even though I lean right, I want to see these issues debated openly and publicly. Part of the problem is you have a media and special interest that will politicize anything.

I'd love nothing more than to see like a two hour debate of all these issues and facts.

Another dilemma is what to do with the millions of high paying jobs in the medical system.

The high wages and salaries affect the final price of service.

High costs of equipment affect the final prices too.

Now what?

originally posted by: xuenchen
Another dilemma is what to do with the millions of high paying jobs in the medical system.

The high wages and salaries affect the final price of service.

High costs of equipment affect the final prices too.

Now what?

easy, dont over pay doctors and over charge for medical supplies...there lots of room for reform there

originally posted by: Aazadan
a reply to: Edumakated

Lack of competition isn't an issue, several insurers are already able to offer across state lines but for the most part they choose to not do it. More competition is always good, and I see no reason to limit anyone to within state lines, but at the same time this is effectively just a talking point. There's not actually any benefit to doing so other than the fact it will make a few people happy.

I agree completely though with your point about portability.

The health maintenance issues, I agree with you on as well... insurance cannot work when routine costs are covered, that's just not what it's designed to do. However, that's what people want it to do, and that's what they're going to continue to use it for. This is much more of a cultural issue, and one of the areas where I think single payer wins out because it actually can address this want from the people. Insurance can only deal with catastrophic costs.

Last, is the free market issue. Lasik and breast implants are very elastic, people for the most part don't need to have them. But if you get cancer, you need to get treatment, and that means the doctors, hospitals, and everyone else involved have more leverage to charge more money because your only other option is death. I don't think the free market works in such a circumstance. It's like food. Even when food prices are high, you have to eat.

There is practically no competition in the health insurance market. For the vast majority, your insurance is provided through your employer. Insurance companies aren't openly competing for individuals at all.

For my point about insurance covering health maintenance, this is where HSAs would be most helpful. People can set aside money and then go out and find the best low cost provider for routine stuff and allow the insurance to cover the major things. Unless the end consumer is in control, there will be no price discipline.

Elective surgery shows that prices will fall on routine healthcare if you keep insurance out of it - phsyicals, flu shots, MRIs, etc.

Insurance needs to be there as a back stop for major illness. Just like your homeowner's insurance is there. Or your car insurance. No one expects State Farm to pay for cleaning your gutters or your car oil changes, yet we expect Blue Cross Blue Shied to pay for every little sniffle and sore throat.

originally posted by: veracity

originally posted by: xuenchen
Another dilemma is what to do with the millions of high paying jobs in the medical system.

The high wages and salaries affect the final price of service.

High costs of equipment affect the final prices too.

Now what?

easy, dont over pay doctors and over charge for medical supplies...there lots of room for reform there

Those may not be the bulk of the expenses.

Wages for all non-doctor positions are usually high too, and may represent the highest percentage of total cost.

Don't misunderstand. I am not advocating a wage reduction program because that would send the general economy into a downward spiral.

a reply to: xuenchen

i did not know they were extremely high...

I am not saying deduce from their wages currently...that is illegal...or it should be.

Just going forward...dont over-pay doctors and employees. Dont over-charge for procedures and equipment.

If college were free...this sure wouldnt be an issue...such as "I paid 7 years for doctor school, i should start out with at least 6 figures"

a reply to: Edumakated

Insurance companies have an incentive to cover routine care though, because that's largely preventative and cheaper to treat. Lets say cancer costs $2 million to treat and 70% of the population gets it. But for the price of 75 annual checkups at $300 each they're able to reduce that to only 50% of the population getting cancer. Not only does that improve quality of life across the board, but it also ends up being cheaper.

That's where the idea of using insurance only for catastrophic costs starts to fall apart. Most long term health issues which turn into expensive treatments are the result of years worth of lifestyle choices or untreated more minor conditions. It's in the insurance companies financial interest to offer preventative care in this situation and that tends to be the stuff people want to use their insurance on.

Could HSA's address that? Maybe, but only for the people who can afford to use HSA's in the first place. The problem with HSA's is that they're not really tax free. Any reduction in income taxes from them simply gets made up elsewhere with other taxes. In the end you pay both the tax and the rate HSA's cost. On top of that, what do you do about people who simply don't use their HSA and instead let insurance pick up the tab when the problem gets serious?

a reply to: veracity

I remember seeing a show many years back on how Japan reformed health care...the govt actually did their job and changed it to benefit all the people, not for the benefit of corporate interests. They set a realistic affordable cost for each and every procedure and for every drug involved. "Health Care" is supposed to be about actually providing health care, not producing a ridiculous financial profit. This is an old article, but it does describe it better than I can.
Japanese Pay Less for More Health Care

I do agree that a huge part of the problem is that people have been so trained to go to the doctor for every little thing that they no longer know how to deal with minor problems themselves and do go to the doctor for every little thing.